Government targets to ensure that millions more adult workers gain higher education qualifications by 2020 will not be met and should be set aside in favour of making sure employees have basic skills, a committee of MPs has said.

In a report calling for a rethink of the skills agenda in light of the economic downturn, the Innovation, Universities, Science and Skills Select Committee said universities had not played a sufficient role in the delivery of skills and that the UK should concentrate on reskilling workers, not "upskilling" them.

Lord Leitch's 2007 report on the UK's skills needs said that 40 per cent of the adult population should be educated to level four by 2020 - increasing the number of those with higher education from about 10 million to 14 million.

"It will not be possible to pursue all parts of Leitch. The targets set are probably impossible," the report, Re-skilling for Recovery, says.

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The select committee's report is particularly critical of the higher education sector.

"The role of higher education within the Leitch agenda, in particular its relationship with employers, appears to us to be a major point of weakness within the implementation of the Government's policy on skills," it says.

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Phil Willis, chair of the committee, said: "We should forget about targets and start to address the core issues. The whole emphasis of the Leitch agenda is about upskilling when in reality the biggest need for the nation is reskilling.

"We have got to be much more realistic ... Simply turning out significant numbers of graduates for whom there is no clear market in terms of employment opportunities is an issue that has got to be addressed.

"We are disappointed that the higher education sector is virtually absent from this whole agenda," Mr Willis said.

He said that the role of universities in reskilling was crucial "when you look at who will be (unemployed), particularly those from (higher education) level four and above ... the financial and other sectors".

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Labour committee member Gordon Marsden said the Higher Education Funding Council for England should be given a new structure to consider regional skills needs when allocating funds to universities.

"The fact that they do need to get a much (firmer) grip on regional skills is not in debate," he said.

Richard Brown, chief executive of the Council for Industry and Higher Education, said that it was a "bit hard" to say that the Government had no clear strategy for involving employers in higher-level skills.

"(It is) attempting to develop co-funding models and (is) funding institutions to develop new approaches that are more demand-led," he said.

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"But the key ingredient for delivering the skills agenda is a credit framework, an approach that helps learners get credit for the learning they have acquired in the workplace. Then (they can) build on that through short courses at further education colleges, private-sector providers or universities."

hannah.fearn@tsleducation.com.